Use the Following Information to Answer the Question(s)below

question 40

Multiple Choice

Use the following information to answer the question(s) below.
Paris Corporation purchased 80% of the outstanding voting common stock of Sanders Corporation on January 1,2011,at a cost of $400,000.The stockholders' equity of Sanders Corporation on this date consisted of $200,000 of Capital Stock and $100,000 of Retained Earnings.Book values were equal to fair values except for land and inventory.The book value of Sanders' land was $10,000,and fair value was $22,000.The book value of Sanders' inventory was $30,000,and fair value was $25,000.
-Under the entity theory,what amount of goodwill was reported on the consolidated balance sheet at December 31,2011?

• A)$185,000
• B)$191,250
• C)$193,000
• D)$200,000

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Definitions:

Expectancy Theory

A theory of motivation based on the premise that the amount of effort people expend depends on how much reward they can expect in return.

Emotional Side

The aspect of a person's character that involves emotions and feelings, impacting how they react to certain situations or interact with others.

Leaders

Persons who guide, direct, influence, or inspire others towards achieving a common goal or vision.

Feedback

Information about reactions to a product, a person's performance of a task, etc., used as a basis for improvement.